Asian stocks rally as US-China trade talks spark optimism; US jobs data lifts sentiment; Hang Seng jumps 1.4%
Asian stocks rallied on Monday, driven by hopes that renewed China-US trade talks in London could ease ongoing tensions between the two economic giants. Investor confidence was further lifted by stronger-than-expected US jobs data, helping Asian markets extend recent gains.
Tokyo's Nikkei 225 rose 1.1% to 38,137.09, despite reports of a 0.2% contraction in the Japanese economy during the January-March quarter.
South Korea's Kospi increased 1.9% to 2,865.52.
Chinese markets advanced despite May export growth slowing to 4.8% year-on-year, compared to April's 8% increase. US-bound exports declined nearly 10% compared to the previous year.
Chinese economic data also showed consumer prices decreased 0.1% in May year-on-year, marking four straight months of deflation.
The Hang Seng index in Hong Kong advanced 1.4% to 24,119.64, while Shanghai's Composite Index increased 0.4% to 3,397.13.
Australian markets remained closed for a public holiday.
Stocks rose on Wall Street Friday after a stronger-than-expected US jobs report boosted investor confidence. All sectors in the S&P 500 gained, marking the index's second winning week in a row and bringing it close to its all-time high after recovering from a slump two months ago.
The S and P 500 demonstrated widespread sector gains, securing its second consecutive winning week and approaching its historic peak.
The S&P 500 climbed 1% to 6,000.36, while the Dow Jones rose 1% to 42,762.87. The Nasdaq also gained 1.2%, closing at 19,529.95.
Technology shares led the upturn, with Nvidia rising 1.2% and Apple gaining 1.6%.
Tesla recovered 3.7%, regaining ground after Thursday's decline following social media exchanges between Trump and Musk.
US employers added a solid 139,000 jobs last month, showing the job market remains steady despite concerns over President Donald Trump's ongoing trade war. Businesses and consumers remain wary of tariffs, but the hiring data suggests resilience in the economy.
Attention now shifts to London, where US and Chinese officials are meeting for another round of trade talks. The negotiations follow a recent phone call between Trump and Chinese President Xi Jinping, raising hopes of progress on easing trade tensions.
This optimism lifted Asian markets, with gains seen in Hong Kong, Tokyo, Shanghai, Seoul, Singapore, Taipei, and Manila. Hopes that Trump may ease tariffs after securing other trade deals have helped the S&P 500 rebound sharply—recovering from a 20% drop two months ago.
Meanwhile, the Organisation for Economic Cooperation and Development (OECD) has lowered its forecast for US economic growth this year to 1.6%, down from 2.8% in 2024.
The OECD's Tuesday forecast projected 1.6% US economic growth this year, lower than last year's 2.8%. Tariff uncertainties continue to influence Federal Reserve policy considerations.
In Monday's early commodities trading, US crude oil decreased 3 cents to USD 64.55 per barrel, while Brent crude declined 5 cents to USD 66.42 per barrel. The US dollar fell to 144.42 Japanese yen from 144.85 yen, while the euro strengthened to USD 1.1422 from USD 1.1399.
Market Snapshot as of 0230 GMT
Tokyo (Nikkei 225): Up 1.1% at 38,137.09
Hong Kong (Hang Seng): Up 1.6% at 24,160.62
Shanghai (Composite): Up 0.4% at 3,399.65
Euro/Dollar: Up to $1.1415 from $1.1397 on Friday
New York (Dow Jones): Up 1.1% at 42,762.87 (Friday close)
London (FTSE 100): Up 0.3% at 8,837.91 (Friday close)
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